When you and your spouse split up, your belongings also part ways. The way divorce deals with property like your home, your vehicles, the bank account, and even pets depends on a number of factors. It pays to understand what is meant by marital property and how to handle it during the divorce, so read on to learn more.
What is Property?
Whether it's considered marital property or separate property, it includes:
- Homes including vacation residences and rental properties.
- Vehicles including motorcycles, recreational vehicles, all-terrain vehicles, and more.
- Boats and trailers of all kinds.
- Bank and investment accounts.
- Cash, gold, stocks, and bonds.
- Furniture, art, and jewelry bought for investment purposes.
What Is Marital Property?
Not everything you and your spouse own is considered marital property. This distinction is important because the portion of your belongings that fall into the marital property bucket can be subject to the rules about dividing property when divorcing. If an item is not considered to be marital property, it is the sole province of the owner of that property and is not affected by the divorce. It's either your own property or the property of your spouse. The following categories of belongings are commonly exempt from the marital property category and will never come into play during a divorce.
1. You or your spouse owned before the date of the marriage.
2. Your or your spouse inherited during the marriage.
3. Was gifted to either you or your spouse during the marriage. Gifts between spouses are not marital property. (Any gift that is treated as more of an investment than a personal gift is marital property, however).
Marital Property Muddles
There are exceptions to all rules and marital property has a big one. Commingling can create a confusing and potentially expensive problem when the couple fails to agree about property divisions. When property is commingled, it causes separate property and marital property to be combined. Here are a few examples of marital commingling:
- Cash from an inheritance was deposited into a joint saving account that was used for emergencies and vacations.
- Gambling winnings were used to purchase a rental property and the income from that rental property was further commingled into a joint checking account.
- A gift of a dog becomes commingled when both parties walk it, feed it, take it to the veterinarian, and care for it.
Marital property divisions are also dictated by whether you live in a community property state or an equitable distribution state. To help alleviate some of the confusion, speak to divorce attorneys like Gomez May LLP to learn more.